Why do we ask for previous compensation?
We do this to identify if there are any elements of your previous compensation that can help you negotiate your current offer effectively.
Even if the total compensation for your current or new role is higher than your previous compensation, there are often still opportunities to identify areas where your previous compensation was stronger - and sharing this with a recruiter is one of the best negotiation techniques you can use.
For instance, your new company may provide a higher total compensation based primarily on increases in base or equity, but provide no 401(k) matching plan. If your previous role offered 401(k) matching, we calculate how much that value was to you every year, then use that amount to request an increase - in base, bonus, or equity - in your new offer.
It can take a bit of digging, but most people have an offer letter, annual compensation plan, or other company-provided documents somewhere in their archives. Providing that information can be worth thousands of dollars in negotiating opportunity.